Honorable
Mention The City of Richmond and Chevron
Corporation Citywide Management Review Project

Chevron
Corporation, formerly Standard Oil of California, has operated a refinery
in the City of Richmond since 1902, and over the years the refinery
management and the City have developed a partnership that has been
responsive to the complex and ever-changing needs of the City as well as
the business challenges that must be faced by a major corporation. This
partnership has been characterized by the creative approaches it has taken
to problems; a recent example of this is found in the approach taken to
the refinery's property tax reassessment.

Responding
to the City's recent reassessment of its refinery property, Chevron
analyzed the assessed value of that property and, based on the results,
filed an appeal of the City's assessment. While the appeal, which could
result in a significant property tax reduction, has not yet been decided,
the consequences for the City are potentially severe, as the total taxes
paid by the refinery amount to well over a third of the City's
budget.

In a
proactive effort to turn this potential problem into a positive result for
the community, Chevron's refinery management met with the City's elected
officials and staff to craft a unique agreement. In it, the property tax
revenues paid to the City by Chevron would be held constant for several
years. During this period, the City would analyze its work processes,
develop and implement recommendations for improving its efficiency and
effectiveness, and ultimately reduce its cost structure. The agreement
also has Chevron providing resources to this effort in the form of
consultants, analysts and facilitation. Chevron executives believe that
the company's continued involvement in this effort, and its
provision of personnel and financial resources, can only increase the
strength of the partnership.

The task
force established by the City to implement the agreement included
representatives of Chevron and was assisted by an additional consultant.
The first phase of the project . the analysis of the City's work processes
and identification of opportunities for improvement . was
accomplished in a five-month period.

The
approach taken by the task force and consultant has drawn individual City
employees into the process and resulted in the development of
cross-departmental cooperation within City government. Officials have been
pleased that it also has produced a City workforce eager to be involved in
developing approaches to the new opportunities emerging. A specific
outcome of the first phase is the creation of some 20 teams of City staff
working on these new opportunities. These cross-departmental teams are
drawing on outside facilitation and are taking advantage of Abest
practices@ from several sources, including Chevron.

The
Richmond City Council is playing an active leadership role in the process,
holding meetings to develop new statements of mission, vision and core
values that serve as a basis for the City's business plans and change
plans. This effort also resulted in the City Council and senior staff
developing both short- and long-term objectives that are giving the City
workforce a much clearer sense of direction.

All of the
consultants who submitted proposals on this project recognized the
uniqueness of what was occurring in Richmond . the fact that the City was
undertaking such a sweeping review of its work processes, a citywide
review that was going far beyond just one or two departments. All involved
agree that while the scale is challenging, the prospect for significant
and sustained change is enhanced by the inclusion of all departments in
the process.

The next
phase of the effort is focused on sustaining the changes that are made
through a Acultural@ transformation of the City's staff. Officials
say such a transformation will produce constructive individual behaviors
and enable the City to manage more independently the continuous
improvement that is anticipated.